Consumers spent big on having fun in 2021
According to data released on September 8 from the Bureau of Labor Statistics, American consumers splurged on entertainment in 2021. People are pictured here at Nathan’s Famous at Coney Island in New York in May of 2021.
After spending 2020 cooped up as a fast-spreading, deadly virus limited most aspects of everyday life, American consumers splurged in 2021, shelling out an average of $3,568 on entertainment, according to data released Thursday from the Bureau of Labor Statistics.
That’s up 22.7% from 2020, and surpasses 2019 levels by just over 15%. The amount that U.S. consumers spent on items like campers, boats, concert tickets, sporting events, pets, toys and televisions is the highest on record and the biggest gain among spending categories.
The amount consumers spent on housing was also the highest on record, up more than 9% from 2019. The share of total spending dedicated to housing was 33.8% last year, down from 34.9% in the nesting-heavy 2020, but up 1 percentage point from 2019. Last year, home prices jumped 18.8%, the biggest increase in 34 years, according to S&P CoreLogic Case-Shiller U.S. National Home Price Index.
The BLS survey on consumer expenditures illustrates just how much spending patterns have changed during this historic period. Overall spending for the year outpaced income growth with spending levels 9.1% above 2020’s and 6% higher than in 2019.
Average incomes before taxes grew nearly 3.7% from 2020 and were up 5.5% from 2019. After-tax income grew 5% and 10%, respectively.
Spending in areas significantly muted due to the pandemic — like restaurants, transportation, travel, and education — bounced back in 2021, with most categories coming close to matching their 2019 levels. However, the data likely shows some influence from inflation, which increased to 7% from 1.3% in 2021.
States Where Residents Are Spending the Most on Food
States Where Residents Are Spending the Most on Food
The COVID-19 pandemic and its aftermath reshaped many aspects of life in the U.S., and how Americans eat and drink is no exception.
Disruptions in the initial months of COVID-19 forced food producers and distributors to adapt how food gets to consumers, and ongoing challenges with supply chains and the labor market have led to shortages at grocery stores. In the restaurant business, many restaurants have reoriented their businesses toward takeout and delivery, with the market for food delivery in the U.S. more than doubling during the pandemic.
Food and drink services employment levels have not yet recovered from the pandemic
The latter trend came in response to major disruption to the foodservice industry from lockdowns and public health measures early in the pandemic. Bars and restaurants were among the businesses hit hardest by these policies. Unable to host patrons at full capacity, establishments drastically reduced their staffing and turned to takeout and delivery to continue operating while keeping costs low. Employment in the sector fell by nearly half in just two months, from 12.4 million in February 2020 to 6.4 million in April 2020. Even after public health restrictions loosened later in 2020, employment in the sector has been slow to recover. Today, the food and drink services industry employs 11.6 million people, well short of its pre-pandemic peaks.
COVID dramatically reversed the previously growing trend of dining out
While the COVID lockdowns of 2020 provided an initial shock to the industry, shifting consumer preferences have also been a challenge for food service professionals. Bars and restaurants reopened over the course of 2020, but not all consumers rushed back. As fears around COVID persisted, many consumers have opted to spend more of their food budget on groceries for meals at home. This phenomenon quickly reversed trends in food spending over recent years. In 2020, spending on groceries as a share of total household spending reached its highest share in two decades, while spending on purchased meals and beverages fell to their lowest levels since the Great Recession.
Inflation in food costs has accelerated since COVID
Time will tell how lasting changes in spending on food will be, especially in light of the high levels of inflation seen over the last year. While since the turn of the century, prices for food consumed at home grew more slowly than those for food consumed outside of the home, the opposite is true since the start of the pandemic. Since 2020, the Consumer Price Index (CPI) for food at home has risen by 18.2%, while the CPI for food away from home has grown by just 13.5% over the same span. The rate of price growth for food at home has been particularly stark after remaining roughly flat from 2014 to 2020. Though households in the pandemic have been more inclined to choose groceries over meals out, rapidly rising food prices have stretched household budgets as a result.
Inflation in the cost of food has been felt nationwide, but residents in some locations will feel the effects more than others. In states with lower incomes, especially in the South, residents spend a higher share of their overall household spending on food. Whether buying groceries or dining out, residents in these locations already struggle the most with food costs and will disproportionately feel the effects of inflation.
The data used in this analysis is from the U.S. Bureau of Economic Analysis. To determine the states where residents are spending the most on food, researchers on behalf of Self Financial calculated all food and beverage spending as a share of total spending. In the event of a tie, the state with the greater grocery spending as a share of total spending was ranked higher.
Here are the states where residents are spending the most on food.
15. Texas
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- All food and beverage spending as a share of total spending: 12.8%
- Grocery spending as a share of total spending: 7.0%
- Purchased meals and beverages spending as a share of total spending: 5.8%
- Food and beverage spending per resident: $5,206
- Total spending per resident: $40,665
14. Alabama
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- All food and beverage spending as a share of total spending: 12.8%
- Grocery spending as a share of total spending: 7.6%
- Purchased meals and beverages spending as a share of total spending: 5.2%
- Food and beverage spending per resident: $4,611
- Total spending per resident: $36,066
13. Hawaii
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- All food and beverage spending as a share of total spending: 12.8%
- Grocery spending as a share of total spending: 8.5%
- Purchased meals and beverages spending as a share of total spending: 4.3%
- Food and beverage spending per resident: $5,731
- Total spending per resident: $44,665
12. Rhode Island
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- All food and beverage spending as a share of total spending: 13.0%
- Grocery spending as a share of total spending: 7.1%
- Purchased meals and beverages spending as a share of total spending: 5.9%
- Food and beverage spending per resident: $5,569
- Total spending per resident: $42,917
11. North Carolina
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- All food and beverage spending as a share of total spending: 13.0%
- Grocery spending as a share of total spending: 7.7%
- Purchased meals and beverages spending as a share of total spending: 5.3%
- Food and beverage spending per resident: $5,068
- Total spending per resident: $39,086
10. Oregon
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- All food and beverage spending as a share of total spending: 13.0%
- Grocery spending as a share of total spending: 7.8%
- Purchased meals and beverages spending as a share of total spending: 5.1%
- Food and beverage spending per resident: $5,542
- Total spending per resident: $42,711
9. New Mexico
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- All food and beverage spending as a share of total spending: 13.0%
- Grocery spending as a share of total spending: 7.8%
- Purchased meals and beverages spending as a share of total spending: 5.2%
- Food and beverage spending per resident: $4,603
- Total spending per resident: $35,420
8. Maine
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- All food and beverage spending as a share of total spending: 13.0%
- Grocery spending as a share of total spending: 8.3%
- Purchased meals and beverages spending as a share of total spending: 4.7%
- Food and beverage spending per resident: $5,906
- Total spending per resident: $45,587
7. Louisiana
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- All food and beverage spending as a share of total spending: 13.1%
- Grocery spending as a share of total spending: 7.5%
- Purchased meals and beverages spending as a share of total spending: 5.6%
- Food and beverage spending per resident:…